The city of Philadelphia is suing 17 online travel agencies, saying they aren’t paying their full share of the hotel occupancy tax.
The complaint says such well-known online companies as Expedia and Travelocity contract with hotels for discounted rooms and then sell the rooms to the public at marked-up prices.
The suit also alleges the agencies collect and pay the city’s 7% hotel tax based on discounted rates rather than the higher prices charged to consumers.
The city of Los Angeles filed a similar suit last year.
A spokesman for the city said it was not known how much Philadelphia was owed.
The city hired a local law firm to pursue the matter after the issue was brought up by a city councilman. The local firm of Berger & Montague P.C. has taken the case on a contingency basis of 30%, according to the Philadelphia Inquirer.
Report by David Wilkening
